Tag: merchant

Starting a business or expanding one needs a big idea and along with it, one needs to have big finance backup too. While some businesses might be lucky to have all the financial needs for their venture, which is a rare case, some might not even start due to lack of finance. Finance is a kind of fuel to innovative ideas without which the business may not move forward.

And when it comes to raising funds for a start-up, a borrower has several options like asking close relatives, taking a loan from a bank, crowdfunding or taking funds from a private institute. Banks have a higher interest rate for loans and also the approval process for the bank loan is normally long and tedious. Hence, it is a better option to borrow funds from a private lender like merchant lenders.

A spa or a wellness care institute requires several machines, staff, location and space for proper operations. All these requirements need to be financed and sourcing this kind of capital is never a walk in the park. While the Canadian government promotes and helps the start-up of small businesses, a proper lender or financial organization must be approached in order to get complete information and help about the Canada Small Business Financing Program.

What are the available options for finance for a small spa and wellness care startup in Canada?

Taking Government help

The government of Canada supports small businesses by providing around 1 million dollars, which can help a business to grow to the next level. However, for the entire application and approval process, a reputed merchant lender needs to be approached so that the application passes through appropriate channels and is approved. 2% of the loan amount is to be paid as fees to the government, and 3% needs to be paid to the financial institution which assists individuals in the application process.
There are several terms and conditions based on which one can get a loan from the Canada Small Business Financing Program. So if one does not qualify for this program, then there are other options to choose as well.

Cash Advance Financing

This system works like a credit card. It allows an individual to withdraw the amount from the credit card based on the sales volume of the business. It can be used in case of emergencies. This mechanism is an excellent and innovative line of credit for small and medium-sized businesses in several sectors. It can help in emergency situations like staff shortfall and machine repair as well as to increase the cost of raw materials or rent. The approval of this loan is done on the same day of application in 95% of the cases. Major advantages of this system include flexible payment options, latest technology usage, and a secure funding stream.

The line of credit

This option is quite different as compared to the standard loan taken from a bank. It allows individuals to have a reserve of funds where they can make a withdrawal according to their needs. Interest is to be paid only on the amount that is withdrawn. There is a maximum limit set on the line of credit. So with the line of credit, there comes a backup of funds in case of emergencies as and when finance is needed.

Apart from these options, the traditional bank loans are also available as finance options in Canada, even though they require several documents and approval mechanisms to be followed.